[Cite as U.S v. Vollmer, 1 F.3d 1511 (7th Cir. 1993)]
UNITED STATES OF AMERICA, Plaintiff-Appellee,
v.
F. J. VOLLMER & Company, Inc., and Kenneth L. Nevius,
Defendants-Appellants.
Nos. 92-2713, 92-2322
UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT
April 8, 1993, Argued
July 30, 1993, Decided
For United States of America, Plaintiff-Appellee (No. 92-
2322): Frances C. Hulin, Ass't U.S Att'y, Office of the United
States Attorney, Danville, IL.
For Kenneth L. Nevius, Defendant-Appellant (No. 92-2322): Tom
Schanzle-Haskins, Nathan P. Maddox, Giffin, Winning, Cohen &
Bodewes, Springfield, IL.
For United States of America, Plaintiff-Appellee (No. 92-
2713): Frances C. Hulin, Ass't U.S Att'y, Office of the United
States Attorney, Danville, IL., Rodger A. Heaton, Ass't U.S Att'y,
Office of the United States Attorney, Springfield, IL.
For F. J. Vollmer & Company, Defendant-Appellant (No. 92-
2713): Steven F. Molo, Bruce R. Braun, Winston & Strawn, Chicago,
IL, Rex L. Reu, Bloomington, IL.
Before CUMMINGS and CUDAHY, Circuit Judges, and ESCHBACH,
Senior Circuit Judge.
ESCHBACH, Senior Circuit Judge. In this direct criminal
appeal, the corporate defendant and individual defendant challenge
their convictions for conspiracy to defraud the United States and
for mail fraud. The individual defendant also appeals his
conviction for false statement. We have jurisdiction pursuant to
28 U.S.C. section 1291. We affirm in part, reverse in part, and
reverse and remand in part.
I.
A.
F. J. Vollmer & Company ("F. J. Vollmer" ) holds a federal
firearms license, and eighty percent of its business is buying and
selling firearms. Kenneth L. Nevius ("Nevius"), a Captain on full-
time active duty in the Illinois National Guard, and F. J. Vollmer
were charged by indictment [footnote 1] with conspiracy to defraud
the United States in violation of 18 U.S.C. section 371 (Count 1),
and mail fraud in violation of 18 U.S.C. section 1341 (Counts 14,
15, 16, 17 and 18). Nevius was also charged with making a false
statement in violation of 18 U.S.C. section 1001 (Count 5).
[footnote 2] All of the charges arose from the defendants'
participation in the purchase and resale of Steyr AUG-SA rifles
from Gun South, Inc. ("GSI"), a firearms importer.
Nevius entered a conditional plea of guilty to Counts 1, 5,
and 18, reserving the right to appeal the district court's denial
of his motion to dismiss the indictment. Following a jury trial,
Robert Vollmer was acquitted of all counts against him. F. J.
Vollmer was acquitted of two counts of mail fraud, but found guilty
of three counts of mail fraud and one count of conspiracy. F. J.
Vollmer filed motions for judgment of acquittal or, in the
alternative, for a new trial. The district court denied these
motions.
B.
The Secretary of the Treasury, Nicholas Brady, acting through
the Bureau of Alcohol, Tobacco and Firearms ("BATF"), imposed a
temporary ban on the importation of various semi-automatic rifles,
including the Steyr AUG-SA. At that time, GSI held valid BATF
permits for the importation of Steyr AUG-SA rifles and had already
remitted payment to the manufacturer for over 1,000 rifles. When
the Steyr AUG-SA rifles arrived in the United States, however, they
were seized by the United States Customs Service.
GSI filed suit against the Secretary of the Treasury in the
Northern District of Alabama, seeking to enjoin the government from
interfering with the delivery of the firearms. The district court
granted the injunctions. Gun South, Inc. v. Brady, 711 F. Supp.
1054 (N.D. Ala. 1989). On appeal, the United States Court of
Appeals for the Eleventh Circuit reversed the district court's
order, finding that BATF was acting within its authority in
imposing the temporary import ban. Gun South, Inc. v. Brady, 877
F.2d 858 (11th Cir. 1989).
Following the Eleventh Circuit's decision, the import ban on
Steyr AUG-SA rifles became permanent. The ban bars private parties
from importing Steyr AUG-SA rifles. Government agencies such as
the National Guard remain free to import the rifles for their
official use. 18 U.S.C. section 925(a)(1). Once a government
agency lawfully imports a firearm under section 925(a)(1), the
agency is not required to retain the firearm for any specific
period of time, and the agency remains free to resell it to third
parties.
On remand from the Eleventh Circuit, GSI and BATF entered into
a voluntary settlement agreement pursuant to Fed.R.Civ.P.
41(a)(1)(ii). This agreement was reduced to a "Stipulation and
Order" entered by the Alabama district court. Under the terms of
the agreement, GSI took possession of the rifles and agreed to sell
the firearms only to law enforcement officers or agencies after it
obtained advanced written permission from BATF for each sale. To
obtain that approval, each prospective purchaser had to submit a
purchase order certifying that the rifle would be used in the
officer's official duties and that the rifle was not being
purchased for purposes of transfer or resale. A supervisory
official also had to certify that the law enforcement officer could
use the rifle in connection with his or her official duties and
that the agency's policies allowed officers to carry and use
personally owned firearms.
C.
In the summer of 1990, Nevius saw a GSI advertisement in the
Shotgun News, offering Steyr AUG-SA rifles for sale to law
enforcement personnel at a price of $ 1,380. He also saw F. J.
Vollmer's advertisement, which stated that it would pay $ 2,200 for
new Steyr AUG-SA rifles. Nevius then contacted GSI and confirmed
that as a military officer he was eligible to purchase a Steyr AUG-
SA rifle.
Nevius obtained an information packet from GSI setting forth
formats for the various documents required to accompany a purchase
order. Nevius prepared the necessary correspondence on his
National Guard unit's stationery to purchase two Steyr AUG-SA
rifles, including a signed statement that the firearms were being
purchased in connection with his official duties and not for the
purpose of resale. He then obtained the required supervisory
certification from a superior officer and ordered the rifles using
funds from his savings account. Upon receiving the rifles, Nevius
took them to F. J. Vollmer and sold them.
A few weeks later, Nevius put together a second transaction,
again for two rifles. Nevius asked Sergeant James McCabe, one of
his subordinates, to sign the necessary purchase order. Nevius
signed the supervisory certification himself and again withdrew
money from his savings account to finance the purchase.
Several months later, Nevius arranged another purchase, this
time for eight rifles. Because there was a limit of two rifles per
purchaser, Nevius approached four subordinates to sign the purchase
orders. All four agreed and signed statements that the firearms
were being purchased in connection with their official duties and
not for resale. In exchange for their signatures, Nevius agreed to
pay each of them either $ 100 or $ 200. (Tr. 345). To finance the
transaction, Nevius borrowed money from the First National Bank of
Taylorville, using an automobile as collateral.
Over the next seven months, Nevius put together the
documentation for five more transactions, following the same
format. In all, Nevius acquired a total of 60 Steyr AUG-SA assault
rifles and 11 Steyr AUG-SA rifle components known as special
receivers. The receivers were classified as assault rifles and
were also subject to the ban. All the assault rifles and
receivers, save one Steyr AUG-SA rifle that Nevius retained for his
personal collection, were delivered to F. J. Vollmer.
In the final transaction, Nevius ordered fourteen rifles.
After Nevius picked up the packages at the United Parcel Service
("UPS") office, he was approached by BATF agents. The agents
questioned him first at the UPS office and then at his home. They
seized the rifles and receivers just delivered as well as the Steyr
AUG-SA rifle from Nevius' personal collection.
Two days later, a BATF agent came to Nevius to home, and
Nevius agreed to cooperate with BATF. While the agent was with him
at his home, Nevius called Robert Vollmer and made arrangements to
deliver the fourteen rifles and seven receivers. Both the
telephone conversation and the subsequent delivery were recorded by
BATF agents. This delivery took place during regular business
hours and the tape recording reflects conversation between Nevius
and F. J. Vollmer employees about the possibility of "getting into
trouble".
Nevius and F. J. Vollmer both filed motions to dismiss the
indictment (R. 29, 32), which the district court denied. Nevius
then entered a conditional plea of guilty to Count 1 (conspiracy),
Count 5 (false statement) and Count 18 (mail fraud) under which
Nevius reserved the right to appeal the denial of his motion to
dismiss the indictment.
The jury acquitted Robert Vollmer, the only agent of F. J.
Vollmer prosecuted, of all six counts against him and acquitted the
corporation of the mail fraud counts arising from two of the
transactions. F. J. Vollmer was found guilty of mail fraud on
three counts and of conspiracy to defraud the United States.
Following the return of the verdicts, the court did not immediately
accept them, and counsel for F. J. Vollmer requested that the jury
be polled. However, after an exchange regarding a motion for
acquittal, the district court dismissed the jury without polling
it.
On appeal, F. J. Vollmer raises seven issues, the first three
of which Nevius adopts. F. J. Vollmer argues: (1) that the
district court erred in imposing criminal liability solely on the
basis of a civil settlement agreement; (2) that the BATF exceeded
its authority when it entered the settlement agreement; (3) that
the convictions are based on a de facto agency rule that was not
promulgated in compliance with the Administrative Procedures Act
(APA); (4) that the government failed to allege or prove that the
conspiracy interfered with a lawful government function; (5) that
the government failed to allege or prove that the mail fraud
deprived the government of a property right; (6) that the district
court deprived F. J. Vollmer of its Sixth Amendment right to a
unanimous verdict by failing to poll the jury; and (7) that the
district court erred in excluding evidence under Federal Rule of
Evidence 608(b). In addition, Nevius argues that his conviction
must be reversed because the indictment was insufficient as a
matter of law to allege conspiracy to defraud the United States,
mail fraud and false statement. We affirm in part, reverse in
part, and reverse and remand in part.
II.
We may easily dispose of the arguments that the convictions
are based on the violation of a settlement agreement and that the
convictions are based on rules promulgated in violation of the
APA. F. J. Vollmer and Nevius were not convicted of violating a
settlement agreement. They were both charged with and convicted of
violating 18 U.S.C. sections 371 and 1341, which prohibit
conspiring to defraud the United States or an agency thereof and
mail fraud. In addition, Nevius was charged with and convicted of
making a false statement in violation of 18 U.S.C. section 1001.
The indictment and jury instructions specifically, stated the
elements of these federal crimes. At no time did the government
allege or argue that F. J. Vollmer and Nevius should be convicted
for violating a settlement agreement. Further, because the
convictions are not based on the violation of the settlement
agreement, the defendants' argument that the settlement agreement
constitutes an improperly promulgated de facto substantive agency
rule is irrelevant. Accordingly, we need not consider whether the
settlement agreement was promulgated in accordance with the
Administrative Procedures Act (APA), 5 U.S.C. section 1 et seq.
Thus, we consider the next argument; whether BATF had authority to
regulate the transfer of an assault rifle from GSI to Nevius.
This is apparently a question of first impression in this
circuit, and we conclude that the BATF's exercise of authority was
properly within its purview. F. J. Vollmer and Nevius argue that
Congress has given BATF no authority to regulate domestic sales of
firearms. They conclude that the rifles were imported once GSI
took possession of them; thus, the settlement agreement regulates
the domestic sale of firearms. Under this argument, therefore,
both the settlement agreement and BATF's limitations on the sales
of Steyr AUG-SA rifles by GSI exceed the authority granted BATF by
Congress. Although the defendants' argument seems persuasive on
its face, we agree with other courts that have considered the issue
that BATF's authority extends to the first domestic sale of a
firearm imported for government use.
The importation of firearms into the United States is governed
by sections 922 and 925 of the Gun Control Act of 1968, 18 U.S.C.
sections 921-929. [footnote 3] Section 922(l) broadly prohibits the
importation of all firearms into the United States except as
provided in section 925(d). [footnote 4] However, federal, state
or local agencies may import firearms pursuant to section 925(a)(1)
which provides that the prohibition of section 922(l):
shall not apply with respect to the transportation, shipment,
receipt, possession, or importation of any firearm or
ammunition imported for, sold or shipped to, or issued for the
use of, the United States or any department or agency thereof
or any state or any department, agency or political
subdivision thereof.
18 U.S.C. section 925(a)(1). We conclude that this language grants
BATF authority to regulate the transfer of a firearm from an
importer to the law enforcement agency for which the firearm was
imported. For purposes of this opinion, we refer to this as a
"first sale."
A common maxim of statutory construction is that statutes are
to be construed so as to give meaning to every word in them.
Indianapolis Power and Light Co. v. Interstate Commerce Comm'n. ,
687 F. 2d 1098, 1101 (7th Cir. 1982). Further, as the Third
Circuit so aptly noted, "we agree to all the generalities about not
supplying criminal laws with what they omit, but there is no canon
against using common sense in construing laws as saying what they
obviously mean." United States v. Lanni, 466 F.2d 1102, 1109 (3rd
Cir. 1972). In order for section 925(a)(1) to have meaning, some
authority must exist to ensure that the exception to section 922(l)
is employed only by governments or their agencies. Thus, BATF must
have the authority to require truthful statements about the purpose
for the purchase of weapons. As we cannot impute to Congress the
intent to allow firearms purchasers to lie, we conclude that BATF
has the authority to regulate "first sales" pursuant to section
925(a)(1).
This conclusion is supported by the importation regulations
set forth at 27 C.F.R. section 178. All importations of firearms
into the United States must be approved by the Director of BATF.
27 C.F.R. section 178.112. Furthermore, firearms may be imported
for a governmental. department or agency and "may be released from
Customs custody upon a showing that the firearm . . . is being
imported or brought into the United States by or for such a
governmental entity." 27 C.F.R. section 178.115(b). Likewise, the
BATF notes in ATF Ruling 80-8 that "[section 925(a)(1)] was not
intended and may not be used as a vehicle by which unimportable
firearms can be introduced into ordinary commercial channels in the
United States." 1980-2 ALCOHOL, TOBACCO and FIREARMS QUARTERLY
BULLETIN 20. These regulations indicate that BATF relies upon
truthful statements when allowing importation for a governmental
entity or agency. Finally, we note that other courts support our
conclusion that BATF has the authority to ensure that firearms
imported for governmental agencies are truly used for official
purposes. See United States v. Goodman, 639 F. Supp. 802 (M.D. Pa.
1986); United States v. Mastro, 570 F. Supp. 1388 (E.D. Pa. 1983).
F. J. Vollmer and Nevius contend that our determination that
BATF has authority to regulate first sales does not end our inquiry
regarding the proper scope of BATF's authority. They contend that
GSI did not import the Steyr AUG-SA rifles pursuant to section
925(a)(1); it imported them pursuant to a voluntary settlement
agreement. They argue that the Secretary of Treasury had no
authority to circumvent the normal procedures for importing
firearms. Century Arms, Inc. v. Kennedy, 323 F. Supp. 1002, 1011
(D. Vt. 1971) (district court held that by barring importation of
the firearms, the Secretary was "refusing to grant an exemption
which he had no authority to grant.") (emphasis added). This leads
the defendants to conclude that the settlement agreement, because
it allowed importation of firearms in a manner outside the normal
procedures, is illegal and of no effect. Since BATF thus acted
outside its authority to regulate the sale, defendants argue that
their convictions should be reversed.
The government points out that regulations promulgated under
18 U.S.C. section 926 allow alternate methods for gaining BATF
approval for the importation of firearms under section 925.
The Director may approve an alternate method or procedure,
subject to stated conditions, when it is found that:
(1) Good cause is shown for the use of an alternate method or
procedure;
(2) The alternate method or procedure is within the purpose
of, and consistent with the effect intended by, the
specifically prescribed method or procedure and that the
alternate method or procedure is substantially equivalent to
that specifically prescribed method or procedure; and
(3) The alternate method or procedure will not be contrary to
any provision of law and will not result in an increase in
cost to the Government or hinder the effective administration
of (this import regulation].
27 C.F.R. section 178.22.
F. J. Vollmer in its reply brief then argues that BATF did not
follow this alternate procedure. It concludes that because BATF
did not follow its own procedure, the settlement agreement is
illegal and of no effect. [footnote 5] Even if it were appropriate
for us to do so, we could not decide this issue because we do not
have a record before us to make this determination. This narrow
issue was not discussed in the motions to dismiss the indictment,
nor was it brought up before the district court by either party.
It is clear from the Stipulation and Order entered pursuant to the
settlement agreement (R. 29, Ex. 2) that BATF believed that it was
acting within its authority under section 925(a)(1) in entering the
settlement agreement, and it believed that this statutory provision
controlled these sales. F. J. Vollmer did not contend that BATF
was acting outside its own regulations for alternate procedures
until this appeal. We will not, therefore, decide this question,
and we conclude that for purposes of this case, BATF was acting
within its legislative grant of authority.
III.
Nevius entered a conditional plea of guilty, reserving the
right to appeal the denial of his motion to dismiss the indictment.
He alleges that the indictment is insufficient to charge conspiracy
to defraud the United States, mail fraud, and false statement. He
argues that the conspiracy conviction must be reversed because the
indictment failed to allege that the conspiracy interfered with a
lawful government function as required by Dennis v. United States,
384 U.S. 855, 861, 86 S.Ct. 1840, 16 L.Ed.2d 973 (1966). He next
argues that the mail fraud count failed to allege that the scheme
to defraud deprived the government of a property right as required
by McNally v. United States, 483 U.S. 350, 360, 107 S. Ct. 2875, 97
L. Ed. 2d 292 (1987). Finally, Nevius argues that the indictment
was insufficient to charge false statement because the statements
did not pertain to a matter "within the jurisdiction" of the Bureau
of Alcohol, Tobacco & Firearms. An indictment is sufficient if it:
(1) states all the elements of the offense charged; (2) informs the
defendant of the nature of the charge, enabling the defendant to
prepare a defense; and (3) enables the defendant to plead the
judgment as a bar to later prosecution for the same offense.
United States v. James, 923 F.2d 1261, 1265 (7th Cir. 1991) (citing
cases).
We address Nevius' claim with regard to the false statement
charges first. Nevius contends that the statements did not pertain
to a matter "within the jurisdiction" of the Bureau of Alcohol,
Tobacco & Firearms. The false statement statute, 18 U.S.C. section
1001, imposes penalties on one who makes a statement that was
false, was material, was made knowingly and willfully and was made
in a matter within the jurisdiction of any department or agency of
the United States. The issue of jurisdiction in the context of a
violation of section 1001 is a question of law, and a department or
agency has jurisdiction only when it has the power to exercise
authority in a particular situation. United States v. Rodgers, 466
U.S. 475, 479, 104 S.Ct. 1942, 80 L.Ed.2d 492 (1984).
Nevius argues that BATF lacked the power to regulate the sales
of Steyr AUG-SA rifles from GSI to Nevius because BATF does not
have the authority to regulate domestic sales of firearms.
However, we resolved this issue in our earlier discussion, when we
concluded that BATF was acting within its proper jurisdiction in
regulating "first sales". Therefore, Nevius' conviction for false
statement is affirmed.
Federal Rule of Criminal Procedure 12(b)(2) requires that a
defendant must raise any objection to the indictment prior to
trial. Without objection, the "indictment should 'be upheld unless
it is so defective that it does not, by any reasonable
construction, charge an offense for which the defendant is
convicted.'" James, 923 F. 2d at 1266 (quoting United States v.
Gironda, 758 F. 2d 1201, 1210 (7th Cir.), cert. denied, 474 U.S.
1004 (1985)).
Nevius objected to the sufficiency of the indictment to charge
conspiracy and mail fraud, but he did not do so on all the grounds
alleged here. In his motion to the district court, he argued that
the indictment was insufficient because BATF acted without
authority and because the settlement agreement between BATF and GSI
was a rule promulgated in violation of the APA. He did not argue
that the indictment was insufficient on the basis of Dennis or
McNally. [footnote 6] Therefore, we will reverse as to Nevius only
if the indictment is so defective that no reasonable construction
charges conspiracy to defraud or mail fraud.
F. J. Vollmer did object to the indictment on the basis of
Dennis and McNally. Therefore, we will uphold the indictment with
regard to F. J. Vollmer if it stated the elements, informed F. J.
Vollmer of the nature of the charge and enabled F. J. Vollmer to
plead the judgment as a bar to later prosecution. James, 923 F.2d
at 1265. Also, because F. J. Vollmer's conviction rests upon a
jury verdict, F. J. Vollmer challenges both the sufficiency of the
indictment and the sufficiency of the evidence on the conspiracy
count and the mail fraud counts. When considering a sufficiency of
the evidence challenge, we "review all the evidence and all the
reasonable inferences that can be drawn from the evidence in the
light most favorable to the government. . . . We will overturn a
verdict only when the record is devoid of any evidence, regardless
of how it is weighed, from which a jury could find guilt beyond a
reasonable doubt." United States v. Durrive, 902 F.2d 1221, 1223
(7th Cir. 1990) (quotations and citations omitted).
Keeping in mind the standards set forth above, we first
consider whether the indictment was sufficient to allege a
conspiracy to defraud the United States. The defendants were
charged under 18 U.S.C. section 371, which is a broad criminal
statute that prohibits conspiracies to "defraud the United States,
or any agency thereof in any manner or for any purpose." The
Supreme Court has held that the conspiracy to defraud element of 18
U.S.C. section 371 encompasses only conspiracies in which the
defendants intended either to cause the government property or
pecuniary loss or interfere with or obstruct a lawful government
function. Hammerschmidt v. United States, 265 U.S. 182, 185, 44
S.Ct. 511, 68 L.Ed. 968 (1924); Dennis v. United States, 384 U.S.
855, 861, 86 S.Ct. 1840, 16 L.Ed.2d. 973 (1966). It is conceded
that the government did not pursue conspiracy convictions on the
basis of property or pecuniary loss. Therefore, the conspiracy
convictions can stand only if the conspiracy interfered with a
lawful government function.
The defendants argue first that BATF was not performing a
legitimate government function. As we discussed fully earlier in
this opinion, BATF was acting within its authority in regulating
the first sale by GSI. Therefore, we move on to the defendants'
second argument; which is that the indictment did not state and the
government did not prove interference with a lawful government
function. We conclude after reviewing the indictment and the
record as a whole that the government alleged and proved
interference with a lawful government function.
In Dennis, the defendants, officers of the International Union
of Mine, Mill and Smelter Workers, were prosecuted for conspiring
to fraudulently obtain the services of the National Labor Relations
Board (NLRB) on behalf of a union by filing false non-Communist
affidavits. On review, the Supreme Court considered whether the
indictment was sufficient to state the offense of conspiracy to
defraud the United States. The defendants argued that on the basis
of Hammerschmidt v. United States, 265 U.S. 182, 44 S. Ct. 511, 68
L. Ed. 968 (1924), the indictment was insufficient because it did
not allege interference with a lawful government function. The
basis for this argument was that the NLRB was required to certify
any union whose officers filed non-Communist affidavits without
regard to the veracity of the affidavits. The Court decided that
if the indictment reflects the essence of the alleged offense, the
indictment will be upheld. The Court stated:
The facts are, according to the indictment, that petitioners
and their co-conspirators could not have obtained the Board's
services and facilities without filing non-Communist
affidavits; that the affidavits were submitted as part of a
scheme to induce the Board to act; that the Board acted in
reliance upon the fact that affidavits were filed; and that
these affidavits were false. Within the meaning of section
371, this was a conspiracy to defraud the United States or an
agency thereof.
Dennis, 384 U.S. at 862.
In United States v. Haga, 821 F.2d 1036, 1041 (5th Cir. 1987),
the Fifth Circuit noted that it is "not altogether clear whether a
'conspiracy to defraud' indictment must specifically allege that
the conspiracy had as its object interfering with a particular,
specific governmental function . . . ." Fortunately, we need not
decide this difficult question because the indictment at issue in
this case included language expressly naming the governmental
agency. The indictment indicated that the conspiracy actively
interfered with the agency's specific function in a definite manner
by contravening the normal requirements for the procurement of
Steyr AUG-SA rifles. In Count 1, the indictment alleged that:
Beginning about June 1990 and continuing through September
1991, in the Central District of Illinois, Kenneth L. Nevius,
F. J. Vollmer and Company, Inc., Robert W. Vollmer, James B.
McCabe and other persons known to the grand jury conspired
together and with each other to defraud the United States of
America and the Bureau of Alcohol, Tobacco and Firearms (ATF)
by providing false and fraudulent documents to the Bureau of
Alcohol, Tobacco and Firearms for the purpose of obtaining
Steyr AUG-SA assault rifles in contravention of the
requirements for sale of such weapons and for the purpose of
resale in general commerce.
Indictment, R. 17 at 3. As long as the indictment charges a
conspiracy "showing. . . more than inadvertent contact with a
governmental agency or incidental infringement of government
regulations," it is sufficient to charge the essence of the
criminal offense. Haga, 821 F.2d at 1041. That test is met in
this case. The indictment stated that false documents were given
to BATF in contravention of the normal requirement. The indictment
also made clear that BATF would not release the weapons unless it
received certification that the weapons were not being purchased
for purposes of resale. Further, the indictment stated that GSI
could not sell the weapons without BATF's express written
permission. The facts as stated in the indictment accordingly
indicate more than inadvertent contact with a government agency and
more than incidental infringement of that agency's function.
Therefore, we hold that the indictment was sufficient as a matter
of law to charge a conspiracy to defraud the United States.
F. J. Vollmer also challenges the sufficiency of the evidence
on the basis that the government did not prove that the conspiracy
interfered with a lawful government function. We affirm on this
issue as well. Carmen Lewis, chief of the firearm and explosive
imports branch of BATF, testified that BATF would not approve these
sales without the proper certification, and that BATF relied on the
veracity of the certifications in approving the sales of Steyr AUG-
SA assault rifles by GSI. (Tr. 259-70). Furthermore, the jury was
instructed that the government had to prove beyond a reasonable
doubt each element alleged in the indictment. Therefore, the jury
must have concluded that the government proved beyond a reasonable
doubt that F. J. Vollmer conspired to provide false and fraudulent
statements to BATF in contravention of the requirements for
purchasing Steyr AUG-SA assault rifles. The evidence shows
interference with a lawful government function and was sufficient
for the jury to find guilt beyond a reasonable doubt.
Nevius and F. J. Vollmer argue that the indictment was also
insufficient to charge mail fraud because it did not allege that
the government had a property interest in the guns as is required
by McNally v. United States, 483 U.S. 350, 360, 107 S. Ct. 2875, 97
L. Ed. 2d 292 (1987). On the same basis, F. J. Vollmer argues
further that even if the indictment was sufficient, the evidence
was insufficient to prove guilt beyond a reasonable doubt of mail
fraud.
McNally requires that the government allege and prove as an
element of the offense of mail fraud that the defendant deprived
the victim of a property right. Id. at 359-61. This principle
holds true when the government is the victim of the alleged scheme
to defraud because "any benefit which the Government derives from
the [mail fraud] statute must be limited to the Government's
interests as property holder". McNally, 483 U.S. at 358-59 n.8.
In this case, the government did not allege in the indictment,
present evidence at trial, nor was the jury instructed on the
deprivation of a property right. On appeal, the government argues
that it held a joint ownership interest in the Steyr AUG-SA rifles
with GSI. The government argues that its right to control the
disposition of the firearms is a property interest and that it was
deprived of this interest by Nevius' and F. J. Vollmer's mail
fraud. This argument fails.
It is well established that the government's regulatory
interests are not protected by the mail fraud statute. United
States v. Bruchhausen, 977 F. 2d 464 (9th Cir. 1992) ; United
States v. Schwartz, 924 F.2d 410 (2nd Cir. 1991) (government's
interest in issuing licenses is regulatory and licenses are not
property for purposes of McNally); United States v. Granberry, 908
P.2d 278, 280 (8th Cir. 1990) (government has no property interest
in licenses and permits); Toulabi v. United States, 875 F.2d 122,
125 (7th Cir. 1989) (government has no property interest in
licenses); United States v. Dadanian, 856 F.2d 1391, 1392 (9th Cir.
1988) (same); United States v. Evans, 844 F.2d 36 (2nd Cir. 1988)
(government's interest in regulation of foreign resales of firearms
is regulatory interest, not property interest); United States v.
Murphy, 836 F.2d 248, 251 (6th Cir. 1988), cert. denied, 488 U.S.
924, 109 S. Ct. 307, 102 L. Ed. 2d 325 (1988) (government has no
property interest in licenses and certifications). In Bruchhausen,
the alleged victims were manufacturers of military equipment and
technology. They sold technology to Bruchhausen on his
representation that it would remain in the United States, when in
fact, Bruchhausen was selling the technology to Soviet bloc
countries. The government argued that the manufacturer's interest
in controlling the ultimate disposition of its property was a
property interest for purposes of the statute. The Ninth Circuit
held that this interest could not be characterized as a property of
the wire fraud statute. Bruchhausen, 977 F.2d at 468.
The property interest alleged here is quite similar to that
alleged in Bruchhausen, and we conclude that the government's
interest in the Steyr AUG-SA rifles is not one that can be
characterized as a property interest for purposes of McNally. In
Bruchhausen, the manufacturer's interest in property it no longer
owned was not a sufficient property interest for purposes of
convicting for mail or wire fraud. In this case, the government
contends that its interest in property it never owned is a property
interest because it has a degree of "control" over the disposition
of that property. BATF "controls" the importation of all firearms
to a certain extent because firearms cannot be imported without a
license from BATF. 18 U.S.C. section 922. However, one would
hardly say that BATF therefore has a property interest in all
firearms imported into the United States. BATF's right to control
the disposition of the Steyr AUG-SA rifles derives from its
legislative grant of authority. Thus, BATF has a regulatory
interest in the disposition of firearms, but its legislative grant
of authority conveys no property interest. The indictment is
insufficient, and it does not by any reasonable construction charge
mail fraud. Therefore, despite Nevius' failure to object on these
grounds specifically, we reverse his conviction for mail fraud.
Likewise, we reverse F. J. Vollmer's mail fraud convictions because
the indictment was insufficient and because the government's
evidence was also insufficient to prove a property interest.
IV.
Finally, F. J. Vollmer argues that certain trial errors also
merit reversal of its conviction. The corporation urges that the
district court erred when it refused to admit testimony from
Nevius' banker that Nevius told him his loans were for business
equipment. Furthermore, F. J. Vollmer argues that the district
court did not poll the jury as requested and therefore, the
conviction must be reversed and remanded for a new trial.
First, we consider the evidentiary question. Decisions
regarding the admission of evidence are left to the district
court's discretion, and we will reverse a ruling on the
admissibility of evidence only upon an abuse of that discretion.
United States v. Allen, 930 F.2d 1270, 1273 (7th Cir. 1991). Here,
the district court determined that the defendants could not
question Tom Bolfing, the loan officer at Nevius' bank, about the
reason Nevius gave for needing the loans. Nevius had said during
his testimony that no one asked for the purpose of the loans, and
that he did not know why the loan applications stated that the
purpose of the loans was for business equipment. The district
court reasoned that for purposes of Federal Rule of Evidence 608
(b), this was extrinsic evidence of a specific instance of bad
conduct designed to attack the credibility of Nevius. [footnote 7]
Therefore the district court did not allow the testimony.
On appeal, F. J. Vollmer contends that this evidence was
material and relevant to the corporation's guilt because it showed
that Nevius went to the bank for loans instead of borrowing the
money from the corporation. It argues that this evidence tends to
prove that F. J. Vollmer did not enter into an agreement with
Nevius and that Nevius was acting independently.
The district court's ruling was not an abuse of discretion.
F. J. Vollmer was permitted to question Nevius regarding his
statements to Bolfing about the purposes for the loans. Further,
F. J. Vollmer was permitted to ask questions of Bolfing regarding
the loans themselves. F. J. Vollmer made its point before the jury
because Nevius testified that he did not ask F. J. Vollmer for an
advance but rather went to the bank for a loan. During closing
arguments counsel for F. J. Vollmer argued that this showed Nevius
was acting independently. Because it had already made its point,
the only other purpose F. J. Vollmer could have had for this
evidence would have been to attack Nevius' credibility. Therefore,
FRE 608(b) applies, and the evidence was properly excluded as a
specific instance of misconduct offered to attack credibility.
The second trial error that F. J. Vollmer alleges was that,
despite its timely request that the jury be polled, the district
court dismissed the jury without polling it. The government urges,
however, that F. J. Vollmer waived its right to poll the jury
because it did not pursue its motion.
A defendant has an "absolute right" to poll the jury to ensure
the unanimity of the verdict against him. Mackett v. United
States, 90 F.2d 462, 466 (7th Cir. 1937). Federal Rule of Criminal
Procedure 31(d) codifies this right and provides:
when a verdict is returned and before it is recorded the jury
shall be polled at the request of any party or upon the
court's own motion. If upon the poll there is not unanimous
concurrence, the jury may be directed to retire for further
deliberations or may be discharged.
The right to poll the jury is a substantial right. United States
v. Randle, 966 F.2d 1209, 1214 (7th Cir. 1992). Failure to poll
the jury upon a timely request is "per se error requiring
reversal." Government of Virgin Islands v. Hercules, 875 F.2d 414,
418 (3rd Cir. 1989).
After the jury returned its verdicts, the district court asked
if counsel wanted to be heard. Counsel for F. J. Vollmer asked
that the jury be polled and the court inquired why counsel wanted
a poll. At sidebar, the district court indicated that it thought
the verdict of guilty was defective against F. J. Vollmer because
the corporation could not be guilty if the corporate agent was
acquitted. Counsel for F. J. Vollmer then moved for a judgment of
acquittal or a judgment notwithstanding the verdict. The court
reserved ruling on that motion. Immediately after the reservation
of ruling, the court dismissed the jury.
The government argues that by making and pursuing a motion for
judgment of acquittal without pursuing the jury poll motion, F. J.
Vollmer waived its right to poll the jury. The government relies
On cases where courts have found waiver when pre-trial motions were
not pursued at trial. United States v. Wilson, 962 F.2d 621 (7th
Cir. 1992) (pre-trial motion to suppress evidence); United States
v. Taglia, 922 F.2d 413, 416 (7th Cir.), cert. denied, 111 S. Ct.
2040 (1991) (pre-trial motion to sever). However, the government's
reliance on these cases is misplaced because the transcript here
does not indicate that F. J. Vollmer ever abandoned the motion to
poll the jury. It simply requested another motion as well. The
district court reserved ruling on the motion for acquittal but did
nothing with the motion to poll the jury. The very next thing the
district court did after reserving ruling was dismiss the jury.
The record indicates no opportunity for F. J. Vollmer to pursue its
motion. The cases cited by the government involve pre-trial
motions which were not renewed at trial. This situation is hardly
comparable, and F. J. Vollmer cannot be said to have waived its
motion when there was no opportunity to raise the issue again.
Because the motion was timely and defendants enjoy an absolute
"right to poll the jury. . . . unless it has been expressly
waived," Mackett v. United States, 90 F.2d at 465, we must reverse
F. J. Vollmer's conviction for conspiracy to defraud the United
States and remand for a new trial.
V.
For the foregoing reasons, Nevius' convictions for conspiracy
to defraud the United States and false statement are AFFIRMED.
Nevius' and F. J. Vollmer's convictions for mail fraud are
REVERSED, and F. J. Vollmer's conviction for conspiracy to defraud
the United States is REVERSED and REMANDED for a new trial.
FOOTNOTES
1. The original indictment was filed on November 6, 1991. R. 1. A
superseding indictment was filed on December 4, 1991. R. 17. For
purposes of this opinion, we refer to the superseding indictment
simply as the "indictment."
2. The defendants were also charged in other counts in the
indictment, but those counts are not at issue in this appeal. The
other counts that charged Nevius with federal crimes were dismissed
pursuant to a plea agreement, and F. J. Vollmer was acquitted of
the other charges against it. The indictment also charged Robert
W. Vollmer, a corporate agent of F. J. Vollmer, with conspiracy and
mail fraud. However, the jury acquitted him of all counts, and
this appeal raises no issue with regard to him.
3. Control over the importation of firearms vests in the Secretary
of the Treasury, who has delegated the authority to the Director of
BATF. See Treasury Department Order No. 120-01 (formerly No. 221),
37 Fed. Reg. 11,696 (June 10, 1972), and 27 C.F.R. section 178.112.
4. Section 925(d)(3) permits importation of firearms that are
particularly suitable for or readily adaptable to sporting
purposes. Prior to March 14, 1989, Steyr AUG-SA rifles were
importable pursuant to this exception. After this date, the
Director of BATF declared that Steyr AUG-SA rifles were no longer
considered suitable for sporting purposes.
5. See, United States v. Nixon, 418 U.S. 683, 695-96, 94 S. Ct.
3090, 41 L.Ed.2d 1039 (1974); Vitarelli v. Seaton, 359 U.S. 535,
545, 79 S.Ct. 9683, L.Ed.2d 1012 (1959); Frisby v. United States
Dept. of Housing & Urban Dev., 755 F.2d 1052, 1055 (3rd Cir. 1985);
Kelly v. Railroad Retirement Board, 625 F.2d 486, 492 (3rd Cir.
1980); United States v. Jones, 368 F.2d 795 (2nd Cir. 1966).
6. The closest that Nevius came to arguing that the indictment was
insufficient on the grounds of Dennis and McNally was at page 12 of
his motion to dismiss. There he argued that a prosecution for
conspiracy to defraud the government would lie only if the purpose
of the conspiracy was to defeat the lawful function of the
government. However, instead of arguing that the indictment was
legally insufficient because it did not allege interference with a
lawful government function, Nevius argued that the BATF was not
acting lawfully in regulating the weapons in this case. R. 29 at
12.
7. Federal Rule of Evidence 608(b) provides in relevant part that,
"specific instances of the conduct of a witness, for the purpose of
attacking or supporting the witness' credibility, other than
conviction of a crime as provided in Rule 609, may not be proved by
extrinsic evidence."